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NAR: Home Prices Increase In A Majority Of Metro Markets

Feb 08, 2024
Photo credit: Getty Images/Korisbo
News Director

National Association of Realtors quarterly update reveals mixed trends in housing affordability and market dynamics.

The latest quarterly report from the National Association of Realtors (NAR) unveiled a significant uptick in home prices across more than 85% of metropolitan markets, coinciding with a drop in the 30-year fixed mortgage rate. 

According to the NAR report, 15% of the 221 tracked metro areas experienced double-digit price increases in the fourth quarter of 2023, representing a notable uptick from the previous quarter. 

“Homeowners have benefited from housing wealth accumulation. However, many homebuyers have been shocked at high housing costs, with a typical monthly mortgage payment rising from $1,000 three years ago to more than $2,000 last year,” said NAR Chief Economist Lawrence Yun. “This doubling in housing costs for recent home buyers is not included in the official consumer price index inflation calculations and contributes to the sense of dissatisfaction about the economy.” Redfin reported the average rose to  $2,607 at a 6.63% mortgage rate in January.

Despite these challenges, the national median single-family existing home price grew by 3.5% to $391,700 compared to one year ago. The South led in existing home sales, capturing 45% of the market share, with year-over-year price appreciation of 3.2%. Prices also saw significant increases in the Northeast (7.3%), Midwest (4.7%), and West (4.2%).

“Sales were restrained due to limited inventory,” Yun said. “But increased homebuilding, along with lower mortgage rates, will not only improve housing affordability but also help bring more homes onto the market in 2024.”

The top 10 metro areas with the largest year-over-year median price increases recorded gains of at least 14.8%, with markets like Dayton, Ohio, and Kingsport-Bristol-Bristol, Tenn.-Va., experiencing substantial growth.

California dominated the list of most expensive markets, with eight out of the top 10 markets located in the state. Markets such as San Jose-Sunnyvale-Santa Clara and Anaheim-Santa Ana-Irvine led in terms of median prices.

However, not all markets experienced price increases, as less than one-fifth saw declines in home prices during the fourth quarter.

While housing affordability marginally improved in the fourth quarter due to declining mortgage rates, challenges persist for first-time buyers. 

A family needed a qualifying income of at least $100,000 to afford a 10% down payment mortgage in 47.1% of markets, up from 45.7% in the previous quarter. Yet, a family needed a qualifying income of less than $50,000 to afford a home in 2.3% of markets, down from 2.7% in the prior quarter.

About the author
Christine Stuart is the news director at NMP.
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